Dec 04, 2017
How a High Stakes Poker Tourney Saved an Entrepreneur's Business
By RTR Dennis
Niko Karstikko was a struggling entrepreneur who was running out of money. He'd started an app called Sportsetter, which is described as the "Uber for fitness." However, it was failing to catch on with investors.
But he changed his fortunes three years ago in a high stakes poker tournament at a Finish startup conference.
“We were running on fumes after a failed investment round earlier that year ,” said Karstikko. “The short version of the story is that even though the papers were signed, the money never showed up.
“I was running a team of 15 people, and we were about to run out of cash. It was not the best circumstances, but my one chance to make it happen was with Slush.”
What is Slush?
Slush is a startup conference held annually in Helsinki, Finland. 17,500 people showed up to the 2017 version, which is below average when compared to similar conferences. However, Slush does draw a large number of highly respected business people and celebrities.
“Slush attracts a lot of high-quality people, from rock stars to royalty to top investors to big-time international entrepreneurs,” said Tom Henriksson, who's a partner at the Finnish VC firm OpenOcean.
According to BusinessInsider, there are rumors that a first-class jet flies venture capitalists straight from San Francisco to Helsinki. And it's possible that the Helsinki conference has more investment cash available than Silicon Valley.
Karstikko Suffers a Major Setback
As for Karstikko, he visited Slush in hopes of forming new relationships and saving his company. But his efforts were made tougher when considering that one of his employees got sick, forcing him to do lower-level work on top of everything else.
“Instead of meeting investors, I’m sorting stickers," he said. "I didn’t close anything and was absolutely demoralized."
How did Poker Save Sportsetter?
After failing to get any investors for Sportsetter, Karstikko was driving home from the conference empty-handed. But a colleague convinced him to go back to Slush and enter the OpenOcean poker tournament.
“We have about 150 to 200 people each year, and the guest list is about half-and-half entrepreneurs and investors,” says Henriksson, who hosted of the 2014 OpenOcean tournament. “The premise is to have good people meet each other, and to have a poker tournament as the cream on top.”
The prize for winning the event was the code to 3.1415 bitcoins, or "one pi's worth." Karstikko wasn't as interested in the Bitcoin as he was in networking. He sat down at the first table and began playing poker.
“Everyone’s wearing a blazer and I’m still wearing my promotional gear,” he recalled. “I recognized some of the top VCs of the world, some partners from Accel, and then 15 minutes later I won the first table.”
Karstikko played well in the tournament and earned a spot on the final table. He was the last startup founder left, facing off against some of the world's top investors. He outplayed his final table opponents and took down the tourney.
Karstikko Gets to Make His Pitch
Following his win, the Finnish entrepreneur was asked if he wanted to give a speech. “No, I wanna pitch,” Karstikko replied.
“I gave a three-minute pitch on what Sportsetter was doing and I got 15 meetings out of it. It was a slow process, but those contacts led to me closing an investment round the following year.”
The 3.14 bitcoins that Karstikko won also came in handy because they doubled in value. He used this money to pay rent and other expenses while waiting for the investment funds.
As for Sportsetter, Karstikko was able to sell the app in 2016 to a Nordic Benefit Programs conglomerate called The Orange Company.
OpenOcean Poker Tournament Continues to Rage On
Given that Karstikko used the OpenOcean tourney to save his company, he's definitely in favor of both the poker action and conference as a whole.
“Slush is awesome,” he said. “That thing saved my ass.”
Henriksson continues to hold the OpenOcean poker tournament every year because it's both different and interests the attendees.
“We are engineers and computer scientists, pretty capable with numbers and math,” said Henriksson. “The subcultures of tech entrepreneurship and poker fuse nicely, so we throw this party with no strings attached. We want people to have fun and make new connections that matter.”